To ask what recession is like and is there any way to prepare?

[sunfloweryy]

Just that really.

I was in my teens for the last one and both my parents were in secure jobs and houses so nothing really changed for me. I barely even registered anything was going on.

Now I’m 27 and bought a house a few years ago with my DH. We were hoping to TTC and upsize next year and have been saving.

I have been reading lots on here that we are likely to go into a recession as a result of all this and I’m starting to feel anxious.

Just interested in people’s experiences of what things might be like on a personal level and if there is anything we can do to prepare ourselves or make it easier?

The recession in the early nineties hit where I grew up hard

No one had any disposable income so no eating out , no holidays

My best friends dad lost his job and as a consequence became depressed and took it physically out on her brother

There were more picket lines and riots and everyone felt more serious, lots of walking into the kitchen where my parents were talking in hushed tones and they'd stop when I walked in

The public sector covers a multitude of jobs but, given that it has been cut to the bone since 2010, and that the importance of the services it delivers has really been brought home to people by this crisis, I think it would be electoral suicide for any government to make further cuts now

Oh they'll definitely be cuts

Where I live no libraries have closed, that's definitely on the cards, the arts will be affected , things like day centre for the elderly will close, food banks will get no local government funding , people will rely on volunteers but volunteers will be down the job centre no doubt

You get the best music in recessions.

You also get life expectancy dropping very significantly due to poverty, lack of healthcare and suicide.

Life expectancy has not dropped in the UK for many decades even though there are recessions.
Annual death rates are actually less during recessions, although there will be more people miserable.
And yes I agree you get the best music during recessions and there is often a flowering of new artists.

And yes there will be more cuts to public services.

The reason less people die during recessions is because there are less car accidents, alcohol related deaths and general accidents. Basically people drive less, do less risky sports like horse riding, and although there are still alcoholics there are less of the half a bottle of wine every night types.

Some cut to public services will be inevitable, yes.

@DCOkeford Sure if we kill all our disabled people, chronically ill people and anyone not in brilliant health over the age of 65, then yes our economy would be in better shape. We would also be a morally bankrupt society to want or act in that way.
We all get old eventually and few are healthy one day and drop dead the next. Most disabled people were once able bodied. Utilitarianism is evil.

Jobs so far seem ok here but others may be affected

Houses may lose some value - more depending on area

We have maybe £100k equity at last valuation and expect this to drop.
We were planning on upsizing in 2 years as baby #2 is coming soon.

However, if we can’t then we won’t and the kids will be ok to share a bit longer. Needs must and all.

Il be more wary about increasing bowling for a while after this anyway.

The economist in the times said that the difference between a recession and a depression is that a recession is when someone you know loses their job from a downturn. A depression is when you lose your job in a downturn.

Generally it’s not something to worry about just yet. It’s good you have been saving and unless you are in a tiny 1 bed flat I don’t see why you wouldn’t be able to TTC as planned and just postpone a house move if you had to

One thing to remember is if upsizing - a drop in the market can actually be more favourable to you anyway.
Don’t lose hope

Having lived through a few since the first I noticed in the 70s we are preparing for it.

In the 70s my parents were reduced to taking the pennies out of our piggy banks. We were well stocked with candles, which were used regularly in the blackouts and we learned a lot of food stretching skills, ate foods we may not have wanted to.

In the 80s we clung on to our one bed flat, watched a number of friends hand their keys back to their mortgage lender (somehow this is never believed by some on MN). We were in our mid 20s and all had new mortgages, were persuaded it was best to own, rents were often much higher than mortgages, rates were low.

We all took advantage of 0 £ deposits and those low rates. DH and I worked nmw jobs and worked out an entirely arbitrary 20% interest rate, we would be able to afford it, so we bought. Rates got very close very quickly!

90s we didn't notice. We couldn't sell our tiny flat, not even give it away. So we both went to Uni, spent the decade on one wage and then, as house prices rocketed, sold the flat and went back to renting. We only bought again about 4 years ago.

So we have some idea what to expect. Our prepping so far consists of checking all outgoings and losing those we don't need, reducing those we can. When shopping gets more normal we will stock up tinned good, dried pulses, oats etc. Candles if course, and I'll trawl charity shops for fabrics, bedding, large size clothing etc. I see so will go back to making basic clothing. Learning how to sew and modify clothes is a good move. It's really very easy and a good second hand machine can be really cheap.

A second freezer can be a godsend, especially if you have kids. It makes bulk cooking much easier, but beware power cuts. You soon learn that the inside of a washing machine stays nice and cold!!! I'll also be looking in charity shops for cold bags, just in case!

Apart from that it's all in your mindset. If you can persuade yourself that every hardship, every lack, is a challenge that is educational, fine even, you might find that you don't get drowned by it.

I have a coupe of friends who are catastrophising, they are bloody miserable. I suspect one of them will cut me loose as a friend as I can't share her absolute dread and am just looking for work rounds and coping mechanisms for what we are living through now and the probable repercussions. We have very similar lives and incomes levels, except I am self employed and wouldn't expect my job to survive a recession.

I'm not saying a positive mental attitude fixes anything, but any vestiges of one makes working your way through scary shit a little bit easier.

I'm sure the Prepper threads will proliferate soon enough, so we can all ask questions and share our thoughts and solutions.

@Curious

Really good post.

High interest rates on loans, but low on savings.
loss of equity in your home, may even have negative equity.
high unemployment, loss of any type of luxury.
I think some might struggle mentally, those used to all their little extras that think they are necessary.
Many never experiencing hardship will be surprised how bad it can get.
Just the sense of despondency is bad, I remember a lot of suicides, mainly young men.
I moved away to work during the 80's like thatcher told us too. I was from a wc northern town in the NW. I remember going back up to see my parents and picking up the local paper.
There was a feature on the unluckiest school year of the time hit by the recession. Reading it and finding it was my school year sent chills when I read that the majority of the boys from my year were dead.
Some killed in Falklands, some from drugs, but most due to being made redundant, not able to find work, and of course back then men were a failure if they couldn't provide for their families.
Not like tody where many couldn't give a stuff once they are divorced.

I would recommend you and any others interested in how bad it was to watch "Boys from the Blackstuff" You'll be saying "gizz a job" and "I cn do that, gizz a job" before too long
Also, things like "The full Monty" give good representation.
There was a better sense of community though through each decade of recession.
I'm not sure if it will come back though as very different times now, and I suppose the spirit was already there before recession.

The best way to prepare is by saving every last penny you have, starting from now.

Your house price going down does not matter if you don't want to love. It is a home after all.
I think being clear what is a need and what is a want helps a lot. A lot of what people seem to see as essentials really are not. The person above saying when they were poor only being able to change car every 7 years - that is normal to me. We run our cars until it is no longer economical to continue running them.
And remember if you are working and doing okay at the moment, then any loss of income is likely to be temporary, maybe for a few years at most. It will get better. But also remember if you are young that this will happen again in your life time.
It is because of recessions that so many older people are very debt averse. Because hard times are harder if you have debt from the good times.

You can also prepare by resetting your values, I think this virus is making us do that already so we have a head start.

TBH, we didn't noticed last recession much as we were in fairly stable jobs and having our first baby at the same time affected us much more.

Be aware that affects can hit much later - I was made redundant as a result of the 2008 financial crash, but not until 2011, when government austerity had caused our market to run out of money to buy as much of our stuff.

is there any way to prepare?
Try to be a member of the Aristocracy or a sports star.

You must live in an area that's much less affected by the austerity cuts than where I live, @bigchris.

We have had several library closures and massively reduced opening hours across the whole county, funding for the arts has been slashed, if they've funded food banks at all the councils have been very quiet about it (and I'm involved with one, so I like to think I'd know), day centres have been massively reduced and are no longer free to attend, children's centres have closed, recycling centres have had their opening hours reduced by more than 20%, rural bus routes have had their subsidies reduced and have had to cut services, the wait for an OT assessment is now several months long, there are no more drop-ins for housing/homelessness advice and a 3-week wait for appointments, EHO appointments for housing disrepair have a wait of several months, play equipment is removed rather than repaired if it becomes unsafe and the roads and pavements are, literally, an accident waiting to happen.

And we pay the 6th highest council tax in the country (well, it was last year, I haven't looked at the league table since the end of the financial year).

I live in an affluent, rural county in the south-east, but the standard of public services here is the worst I have known in all my 64 years, and half of that was in London boroughs.

Minimise expenditure, save hard, work hard

I think you and I must be similar in age @CuriousaboutSamphire. I bought my first house in 1982, saw it more than treble in value in 6-7 years then drop to around 50% of that 3 years later. Several friends handed their keys back during that period.

And I can remember someone at work bursting into tears on Black Wednesday in '92 when the news came through that the base rate had gone up to 15% in an attempt to prop up the plummeting pound. They had been struggling to keep their heads above water when rates hit 10%, 12% had seen them so skint they were having beans on toast for their evening meals and 15%, had it continued, would have seen them lose their home. Her husband was a partner in an accountancy firm too, so I think his career would have been fucked.

Once they stopped tracking the ERM things soon settled down though. It was only 6 months later that I was able to sell my house and buy another, and 3 years after buying that house it had gone up by 40% and things were booming again.

@Devlesko's right about saving.

I'd try and reduce every outgoing possible: switch utilities, ditch Sky, don't renew any contracts without using comparison sites, don't get a new phone or a car on PCP, don't enter into any credit agreements.

Cut your spending to the bone and squirrel away as much as you can once you've paid off credit, and learn to cook from scratch, with cheap ingredients. Being able to mend clothes might come in handy, too, you don't want to have to throw away a skirt just because the zip has bust.

And if we don't get a bad recession, you'll have learned some valuable skills and got some money saved up!

I graduated in 1987. Pretty much all my uni friends moved down to London and the South East for work. Living accommodation was grim, the streets were full of the homeless, none of us could afford to buy a flat.

We moved a few miles out of London and bought in 1992. Our flat was £56k and the people we bought it from had paid £89k for it. Interest rates went crazy, we had two kids under two and I was a SAHM. We had less money coming in than going out every single month: no tax credits or any kind of help from the government in those days.

We bit the bullet and DH got a job up north in his home town. I took us a year to sell our flat and we had to drop to £49k. This was 1995. We rented for a bit and we were very skint.

DH’s new job went well and we bought a tiny house. We didn’t have much money for many years and lived very frugally. But we had our lovely kids and we were fed and had a roof over our heads.

Times have moved on, things got better. Financially we’ve done really well in the end. We are menders and savers though. We remember what it’s like to have very little.

Our DD1 works in an office. She has a place on a PGCE for next year, but she has great sales skills and was considering making that her career instead. The immanent recession has decided her to go for security and do the PGCE.

Lakie

I totally agree, and not wanting to scare folk, but no job is safe in a recession. We tend to think of it as min wage/entry jobs being the only ones affected, and they are to a great extent, but it's surprising how many middle jobs go too.
I remember in the 90's a whole level of management going from finance.
Banks lost middle management, there one day, gone the next.
As awful as it sounds unless you have a small mortgage you can pay off fully, paying extra isn't going to help if you are likely to lose your home. Sorry, but that needs to be said. You'll need that money to live, because £94 pw wtc, isn't going to buy you much.

Start household management now, look at cheap meals, where to buy cheaper, reduce your monthly outgoings. Cheaper phone contract, close subscription accounts/ don't renew.
Look at living on the lowest amount possible.
Kids don't need everything, look at cheaper options for presents. Get them growing fruit and veg if you have the space. Encourage them to like the simpler things in life, we have a head start with this shutdown.

We are quite frugal any way and between us usually save £1000+ a month plus.

Is it better to keep putting this in savings accounts or should we start over paying the mortgage? We are on a fix but can overpay £1K per month without breaching.